Congress must pass a bill to reform the widely criticized Medicare audit and appeals process, according to one senator pushing for major changes.
Sen. Ron Wyden (D-OR), the ranking member of the Senate Committee on Finance, joined forces with its Republican chair, Sen. Orrin Hatch of Utah, to champion the reform.
The Recovery Audit Contractor (RAC) program, in place since 2010, identifies improper payments to providers, mainly hospitals, and has recovered more than $10 billion since it was launched. But in recent years the program has slowed considerably, with far fewer audits and less money recovered as changes were introduced by the Centers for Medicare and Medicaid Services (CMS).
Certain audits were suspended entirely in early 2014, and while these later restarted, their number and scope is considerably less than in the earlier years of the program.
A massive backlog in the appeals process means it can take two years for one to be heard by an administrative law judge. The American Hospital Association said last week the average time to process appeals has climbed to 935.4 days
Under the program, contractors are hired by the CMS to review records and recover improper payments. Hospitals dislike the program, particularly as the contractor’s compensation is tied to the amount of money recovered. Some hospitals appeal every claim against them.
The Government Accountability Office reported last year that $45.8 billion was misspent under Medicare. In response, senators have introduced the Audit & Appeals Fairness, Integrity and Reforms in Medicare Act of 2015.
“The voices of too many patients, providers, and states are going unheard because the gears of the Medicare audit and appeals system have ground to a halt,” Wyden told Patient Daily in an email. “The ongoing dysfunction plaguing the appeals process comes at the expense of those stuck in the system. ... It’s high time Congress ends this bureaucratic water torture by passing the Finance Committee’s bipartisan reform bill.”
The bill, according to the committee, would increase coordination and oversight of Medicare claims review contractors. Further, it would implement new strategies to address the growing number of review contractor determination appeals, reduce review burdens on providers, and give review contractors the tools necessary to better protect the Medicare Trust Fund.
The American Hospital Association (AHA) blames inappropriate claim denials by contractors for the appeals backlog.
In a statement issued last week, the AHA urged the Department of Health and Human Services to identify and implement controls to limit inappropriate claim denials by Recovery Audit Contractors.
It called these “a critical component of an effective and permanent solution to the appeals backlog.”
The Council for Medicare Integrity, in its 2016 report, said the number of issues auditors were allowed to review “drastically decreased” after audits restarted following the 2014 suspension.
“The RAC Program has continued to be severely limited in its auditing capabilities since this time,” the council, a group set up to monitor Medicare misspending, said. “As a result, annual Medicare improper payment recoveries have dropped significantly, from $3.75 billion recovered in 2013; to just $2.39 billion recovered in 2014.”
